8 Effective Ways to Track Employee Performance in 2025

Most companies track employee performance with the best intentions, but end up damaging trust, wasting time, or focusing on the wrong metrics.

The real question isn’t if you should track performance. It’s how to do it in a way that drives growth, not frustration.

Here, we’ll explore a modern, human-centered approach to performance tracking that helps teams stay aligned, managers lead smarter, and employees feel empowered, not watched.

In this article:

• Meaning of perfect performance tracking
• The best way to track employee performance
• Essential KPIs and tools for monitoring performance
• Frameworks and templates for performance reviews

Are You Tracking Performance or Just Activity?

Tracking employee performance means watching how well employees do their jobs. It helps you see if they are helping the team and company reach their goals.

Here's how it works: First, you tell employees what you expect from them. Then, you keep track of how they are doing. You can do this by measuring progress, asking for feedback, and doing regular reviews.

This helps everyone know if things are going well or if they need to improve.

The goal is to understand each team member's productivity and strengths. It also identifies areas that need support or development.

However, it’s important to distinguish tracking from micromanaging. Performance tracking focuses on outcomes and progress.

In contrast, micromanaging or extensive employee monitoring involves excessive control and personal interference.

While tracking encourages autonomy and trust, micromanaging often reduces morale and productivity.

Employee performance tracking supports HR goals like development, retention, and fair recognition. It also drives business success by aligning people’s efforts with strategic objectives.

How to Track Remote and Hybrid Team Performance

Here's a comprehensive approach to track how well remote and hybrid teams are doing:

1. Set Clear, Measurable Goals

• OKRs (Objectives and Key Results): Write down what you want to achieve. Make sure you can measure if you reached it.
• KPIs (Key Performance Indicators): Pick numbers that show how well you're doing. This could be how many projects you finish, how happy your customers are, or how much you sell.

Everyone should understand what success looks like.

2. Use the Right Tools

• Project Management Tools: Use Trello, Asana, or Jira to keep track of your work. These tools help you stay organized and responsible.
• Time Tracking: Use Apploye to count work hours.
• Collaboration Platforms: You can use Slack, Microsoft Teams, or Zoom to talk with your team. Google Workspace or Microsoft 365 is great for sharing files with others.

3. Regular Check-ins and Updates

Regular check-ins help everyone stay on the same page. To do this, daily stand-up meetings let team members share updates and talk about problems. Meanwhile, one-on-one meetings help people grow in their jobs.

Finally, short written reports show progress without having too many meetings.

4. Monitor Outcomes, Not Activity

Tracking work by results rather than hours builds trust.

So, instead of focusing on time online, assess deliverables, deadlines, and quality. This shift promotes a results-oriented culture and encourages autonomy.

5. Encourage Self-Reporting and Autonomy

Give workers control over their work. This makes them care more. When people check their own progress, they take more responsibility.

Also, let people choose when to work. This helps them do better when they work both at home and in the office.

6. Analyze Team Collaboration and Communication

You can watch how your team works together by looking at chat data. Apps like Slack and Teams show who talks a lot and who stays quiet.

This helps bosses spot problems early. They can help team members who seem left out or not involved.

7. Address Performance Issues Quickly

Fix problems as soon as you see them. Use tracking data to identify patterns, then hold constructive conversations.

This approach maintains accountability while offering support.

8. Continuously Improve Your Process

Change your performance tracking as your team changes. First, check what works well on a regular basis. Then, ask your team for their thoughts.

As a result, your tracking stays helpful and right for your team's needs.

What’s the Best Way to Track Performance Without Being a Micromanager?

Most leaders don’t track performance correctly. They just track the wrong things. The most they do is track productivity with daily task completion rate or use a staff monitoring solution.

It is micromanagement in disguise. Vague goals. Metrics that create pressure, not progress.

I’ve seen it break trust, reduce engagement, and lead to quiet quitting, even in high-potential teams.

But it doesn’t have to be this way.

Here are 3 shifts we made that changed how we track performance:

• Clarity over control: Move from vague expectations to crystal-clear, role-specific KPIs.
• Progress over perfection: Instead of obsessing over numbers, focus on tracking growth trends and learning curves.
• Dialogue over data-dumps: Pair performance metrics with regular 1:1s that explore why someone’s progressing, not just how much.

Top Key Performance Indicators (KPIs) You Need to Track

The Key Performance Indicators (KPIs) are a set of measurable values. They demonstrate how efficiently a team or a business achieves its primary goals.

For instance, online stores track when customers leave items in their shopping cart. This helps them understand how shoppers behave. If this happens more often, it could mean the website is too slow or it's too hard to complete the purchase.

KPIs show you real facts. You don't have to guess what's working anymore.

KPIs turn your goals into something you can track. You can see if you're moving forward or not.

When used right, KPIs help your team stay on the same page. Everyone knows what they're working toward.

You can watch your progress over time. And if something isn't working, you can change your plan.

You can set KPIs using frameworks like SMART goals and OKRs.

SMART goals help you succeed. Your goal should be:

• Specific - Be clear about what you want to do.
• Measurable - You can track your progress and know when you finish.
• Achievable - It's possible for you to do.
• Relevant - It matters to you and your life.
• Time-bound - Set a deadline to finish by.

This makes your goals a lot easier to reach.

For example: ”Grow newsletter subscribers by 10% in 30 days” is better than “Build our email list.”

On the other hand, OKRs (Objectives and Key Results) are a little different.

You state a specific goal, such as “Improve user retention,” and put the key results under it. Similar to “Reduce churn by 15%” or “Get 500 users to upgrade”.

Every department has different goals.

In sales, companies might track the following KPIs to see how well they're doing:

• How many sales you close
• How many people buy out of those who show interest
• How long it takes to make a sale
• How much money you spend to get each new customer

In marketing, however, KPIs focus on two main things: reach and engagement.

Reach means how many people see your marketing. Engagement means how much people interact with it.

Here are some common marketing KPIs:

• Campaign ROI (how much money you make compared to what you spend)
• Website visitors
• How many people open your emails
• Likes, shares, and comments on social media

Digital marketing teams often track paid ads. They want to see if these ads bring in new customers and make people aware of their brand.

And customer support teams measure their success by tracking how many tickets they solve. They also measure how fast they respond to customers. And they check if customers are happy with their service.

For example, a tech support team might set a goal. They want to fix 95 out of every 100 support tickets within one day.

So, how do you choose the right KPIs for Your Team?

Here are some tips:

• Make sure KPIs support the company’s strategic plan.
• Create KPIs with input from team members’ daily roles.
• Focus on numbers that truly add value, not just look good.
• Regularly update KPIs as business goals change.
• Ensure everyone understands what’s tracked and why it matters.

Best Tools for Employee Performance Tracking

Apploye – Time Tracking, Productivity Monitoring & Remote Team Management

Key Performance Tracking Features:

• Time tracking: This time tracker with screenshot tracks how long employees spend on tasks/projects.
• Screen Recording & Screenshots: Screen monitoring takes periodic screenshots and continuous recording for visibility into employee work.
• Activity level: User activity monitoring measures mouse and keyboard activity to gauge engagement.
• App & URL tracking: Internet usage and online activity monitoring show which tools and websites employees use.
• Productivity reports: Generate daily, weekly, and monthly performance insights.

Best for: Remote teams, freelancers, and companies needing granular time and activity tracking.

Goal Tracking

Apploye is one of the best employee productivity tracking software. It allows teams to set clear goals and measure productivity. You can split big goals into small steps. This helps everyone stay on track and work together.

Real-Time Dashboards

The dashboards show what's happening right now. You can quickly see what your team is doing, how tasks are going, and how much time people are working.

Managers at an instant can view who is working, what is pending, and where the need for help is needed.

Integration with Task/Project Tools

Apploye integrates with tools like Jira, Trello, and Asana. It makes managing tasks, sharing updates, and collaborating across platforms easier. You don’t need to juggle between apps.

BambooHR – Employee Data & Performance Management

Primarily an HR software, BambooHR includes performance management tools that focus more on qualitative aspects than granular time tracking.

Features

• Performance Reviews: Simple review cycles with custom templates, goal tracking, and peer feedback.
• Employee Self-Assessments: Facilitates self-reflection and engagement.
• Goals and OKRs: Track progress toward objectives across departments.
• Reports & Dashboards: Overview of team performance metrics, engagement trends, and feedback summaries.

Best for: Long-term development tracking, HR-driven evaluations, and employee engagement.

Clockify – Time Tracking & Productivity Monitoring

Clockify is a time-tracking tool that helps teams and individuals log hours across projects and tasks.

Features

• Time Entries: Manual or automatic tracking of hours worked.
• Project & Task Tracking: Assign time to specific clients, tasks, or projects.
• Reports: Visual summaries of how time is spent (useful for measuring billable vs non-billable hours).
• Productivity Overview: Basic tracking of productive vs idle time.

Best for: Measuring output and time allocation efficiency on tasks or projects.

ActivTrak – Workforce Analytics & Behavior Monitoring

ActivTrak focuses on employee activity monitoring and analytics, with a strong emphasis on productivity insights.

Features

• Behavioral Data: Tracks app and website usage, idle vs active time, focus hours, and more.
• Productivity Reports: Charts and dashboards showing how individuals or teams spend their time.
• Workload Balance: Helps identify overworked or underutilized employees.
• Risk Alerts: Flags unusual activity that could indicate disengagement or security issues.

Best for: Monitoring work habits, detecting burnout risk, and data-driven performance coaching.

Best Employee Performance Review Frameworks and Templates

When creating a strong performance review system, understanding the following methods is essential.

360-Degree Feedback

Over 85% of all Fortune 500 companies use the 360-degree feedback process as a fundamental part of their overall leadership development plan. [Source: Forbes]

360-degree feedback means getting reviews from many different people at work.

Your boss reviews you. Your coworkers review you. The people who work under you also review you. Sometimes, customers or outside partners review you, too.

This helps get a full picture of how well you work with others and how you lead.

• The good part: You get feedback from many different viewpoints.
• The hard part: It takes a long time to do. Also, people might let their personal feelings affect their reviews.

This type of review works best for jobs where you need to work closely with others or lead a team.

Continuous Feedback and Annual Reviews

Continuous feedback means managers and workers talk regularly. They might meet every week or month. This helps people get better right away. It also helps everyone stay on the same page.

In contrast, annual reviews happen once a year. They are formal meetings. People talk about what they did well, their goals, and their pay.

But annual reviews don't show how someone is doing right now. If there's a problem, you have to wait a whole year to fix it.

This is why Adobe stopped doing yearly job reviews. Instead, they started having regular short meetings with workers.

This change helped the company a lot. They hired 30% more people. Workers became happier and stayed at their jobs longer.

The new system works better because workers get feedback more often. It also helps workers understand how their personal goals match what the company wants to achieve.

That's why many companies now do both.

They have regular check-ins during the year. Then they also have one big meeting at the end of the year to look at everything together.

Self and Peer Reviews

Self-reviews make people think about their work. They help workers see how well they are doing and what problems they face.

And reviews from coworkers give more information about how people work together. Managers might not see these things themselves.

"If we shield ourselves from all feedback, we stop growing."

- Dr. Brené Brown, research professor at the University of Houston

These reviews help a lot. But they need clear rules to be effective. The rules require clear guidelines to avoid bias and ensure constructive feedback.

Below are some basic templates for employee performance tracking that you can use to get a synopsis of your employee's performance.

An overall employee performance review template

Through this template, you will be provided with the criteria of technical skills, productivity, attendance, and teamwork.

Download: Excel • Google Sheets

Annual employee evaluation template

This template provides an annual summary of the performance standard outcomes of your previous reviews and gives you a boost in mastering how to track employee performance.

This template does a better job of describing individual goals than it does quantifying them. You can list an employee's accomplishments since the previous report with the help of an annual template.

Download: Excel • Google Sheets

5 Mistakes Leaders Make in Employee Performance Tracking

Who Needs Employee Performance Tracking?

HR Managers

HR managers look at how well people do their jobs. This helps them create training to teach workers new skills. They also use this information to watch how teams are doing. It helps them pay people fairly. And it helps them decide who should get promoted.

Team Leads

Team leaders use employee performance tracking to track progress. It provides timely feedback, coaches individuals, and improves how the team works together. With this insight, they can catch issues before they snowball.

Business Owners and Operations

For business owners, performance data shows how well processes are running. It highlights inefficiencies and guides smarter resource allocation. This is key to scaling smoothly.

Remote Team Managers

Finally, remote managers use tracking tools to manage distributed teams. The tools help managers see productivity levels.

For example, GitLab is a software company where everyone works from home. They use a goal-setting system called OKRs.

Every three months, teams share their goals with the whole company. This helps everyone stay connected and work together.

In 2022, GitLab found that this system worked well:

• 90% of workers felt more connected to the company
• 80% said they were more productive

Sharing goals openly helps remote teams work better.

This works better than watching employees too closely. It builds trust between managers and workers. It also makes expectations clear for everyone.

Tracking Without Breaking Trust: How to Stay Transparent, Fair, and Ethical

Watching how well employees work can help. But you need to do it the right way.

First, be honest about what you collect. Workers should never feel like they are hiding things from them.

Tell them what you track, why you track it, and how you will use this information.

When people know why you are watching their work, they feel it is fair. They do not worry or feel suspicious.

Also, let employees see their own data.

When workers can see what you collect about them, they feel trusted and respected. They can also check for mistakes and see how you judge their work.

It is also important not to use spyware-like tools. Never record what people type without telling them, capture screens without authorization, and monitor employees outside office hours. These things make workers angry and destroy trust.

Tracking only works when it helps everyone work together. It should not be used to punish people.

How to Use Employee Tracking Data to Improve Team Performance

To make your team work better, first look at your data. Find patterns in things like how much work gets done, how many mistakes happen, or what customers say.

For example, if your team finishes fewer tasks at the end of each month, check if deadlines don't match up well or if some people have too much work.

Once you see a clear pattern, find out who needs help or training. If someone keeps struggling with the same thing, they might need to learn new skills or get better tools.

Next, share what you learned in a clear way. Connect it to your team's goals.

Managers should show how actions affect results.

For instance, if a project is late, show how missed updates slowed things down. Don't blame people - focus on what happened.

Use real examples and pictures, like charts or graphs. Ask questions and listen to feedback. This keeps everyone talking and focused on fixing problems.

Feedback becomes more meaningful when it helps people grow. If someone always hits their targets, tell them they're doing great. If data shows someone seems uninterested, find out what help or changes they need.

Also, keep track of how engaged people are, how many quit, and how well they perform. This helps you spot problems early.

As an example, let’s look at the study from Best Buy. They found that when workers felt more engaged at work, stores made more money.

Here's what they discovered: If employee happiness went up by just 0.1 points on a 1-to-5 scale, each store made $100,000 more in sales that year.

This shows that happy, engaged workers help businesses make more money.

Conclusion

Tracking employee performance is essential for understanding individual strengths and areas needing improvement. It gives organizations valuable insights to boost productivity and support growth.

However, tracking must be done thoughtfully. Without transparency, it can create anxiety or mistrust among employees.

When done right, performance tracking helps both employees and organizations grow. It leads to better results and a healthier work environment.

Frequently Asked Questions About Tracking Employee Performance

How do you measure the performance of an employee?

Employee performance is measured by well-defined KPIs, which are aligned with organizational goals. Regular reviews keep the performance over time and show areas of improvement.

How do you monitor staff performance?

Staff performance is monitored through regular reviews and clear KPIs. Managers track progress using reports and direct observations. Feedback sessions help identify strengths and areas for improvement.

What methods do you use to track your team members' performance?

We track team performance using clear KPIs and smart goals. We use management tools and time trackers to monitor work. Regular productivity metrics and constructive feedback help us improve. Annual reviews and 360-degree feedback ensure comprehensive appraisals.

How can an employee's productivity be legally monitored and measured?

Employee productivity can be legally monitored by tracking time spent on tasks and comparing resources used to results. Employers may also analyze profitability to measure performance. Federal law allows monitoring of company equipment, but some states require taking employee consent.

What is the best employee monitoring and productivity tool?

The best employee monitoring and productivity tool is Apploye. It offers real-time screenshots, activity tracking, and detailed reports. Apploye helps managers boost productivity and track work efficiently.

How can mobile reporting apps help in tracking employee performance?

Mobile reporting apps help track employee performance by providing real-time data on attendance and activity. They also track training progress, highlighting who may need extra help. This makes monitoring easy and accurate.

How do you keep track of employee work?

We track employee work using time tracking and project management tools. These help monitor hours and task progress. Employee monitoring systems also ensure productivity is on point.

What are the most effective ways companies can track employee productivity without reducing motivation?

To track productivity without reducing motivation, companies should set clear goals and encourage self-management. Regular, constructive feedback helps employees improve without feeling micromanaged. Transparent communication builds trust and keeps everyone aligned.

What are the most important metrics to track using employee self-service software?

The most important metrics to track in employee self-service software are adoption rates, task completion times, and user satisfaction. Tracking these helps improve HR efficiency and employee engagement.

What methods do managers use to measure employee performance for raises and promotions?

Managers measure employee performance for raises and promotions using regular performance reviews, KPIs, 360-degree feedback, and peer reviews. These methods highlight strengths, weaknesses, and overall contributions. It helps managers make fair decisions about raises and promotions.

Can employee monitoring software track personal activities?

Yes, employee monitoring software can track personal activities if used on the same device. Tracking depends on software settings and company policies. Legal and ethical rules vary by location and require employee consent.